Epstein’s Early Wall‑Street Rise and Elite Connections in the 1970‑80s

1970s. A meritocracy on steroids, or, as Vanity Fair would baldly dub it, the new establishment, an increasingly parallel world, a self-invented one, at further and further remove from the ordinary one. Epstein often tells his middle class to riches tale: born in 1953 in Coney Island, father worked for the city’s Parks Department, mother a housewife. The captain of the math team at Lafayette High school in Bensonhurst, he went on to Cooper Union where the tuition is free. He dropped out after two years. Without a college degree, an unsolved mystery , he got a job teaching math and physics at Dalton in 1974. (A few years ago, during a chance encounter with a former Dalton math department chairman, Margo Gumport, I asked her about Epstein. She said he was the most brilliant math teacher at Dalton in her 50-year career and that she had often wondered what had become of him.) Dalton fathers perhaps sensed in him a young man on the make. Punch Sulzberger, the publisher of the New York Times, and a Dalton father at the time, tried to recruit Epstein to come to the Times. (Epstein recounts a story of riding with Sulzberger in his faux wood paneled station wagon to the family’s country estate and Sulzberger talking to the chauffer on a phone from the backseat to the front.) Another Dalton father, asking “wouldn’t you rather be rich than be a teacher?” introduced him to Bear Stearn’s chief Ace Greenberg. Hence, Epstein, like many in the late ‘70s, arrived on Wall Street. Ifon one side of Wall Street there were the salesmen (the Wolf of Wall Street model), on the other side there was a new sort of finance type able to embrace a level of acute abstraction. “In the past,” says Epstein, “investing was all about reputations and relationships. You invested in a company on the basis of who was running it. Did they have integrity? Were they married? Good family men? It was a ‘50s mentality. But in the mid ‘70s stock options started to be traded. In essence, the first version of formal derivatives. The movement of the instrument was not directly attached to the stock price but a derivative of it. The world of investing began turning from relationships to math. In a sense I didn’t really know how to make money , as I produced little. I merely tried to learn how to “create” money. He soon became the protégée of Jimmy Cayne (also hired by Ace Greenberg on a whim—he met him ina bridge game), who would go on to run Bear and to lose his fortune in Bear’s 2006 collapse). Epstein’s leave- taking or ouster from Bear was the result of politics, envy, overreaching, or a securities violation, or...unclear. But, no matter, when he left in 1982 he took with him billionaire clients, including Marvin Davis, a real estate developer who owns Twentieth Century Fox, and Herb Seigel, a major media investor in the 1980s. At this point, Epstein was dating Morgan Fairchild, a television star in the new mega-rich-family soap operas, Dallas and Falcon Crest. If the “80s were happening pell mell in New York, they were happening at double time and catch up speed in London. “I would head to Kennedy Airport and, on the theory that most important events in one’s life are serendipitous, I wouldn’t decide where I was actually going until I got there.” Thirty-year-old Epstein was living a Lifestyle of the Rich and Famous (he befriended the show’s star, Robin Leach), at English shooting parties and country estates with Saturday night black tie dinners, where he was meeting the over-the-top families of Europe. At the same time, he was developing a perception, or, at least a market differentiation: the hyper wealthy had different problems than the very wealthy. Dealing with a billion dollars was different from dealing with $10 million. “The traditional wealth service structure, an accountant, and investment advisor, a personal lawyer, and an less that stellar brother-in-law, became hopelessly outdated as amounts exponentially increased. You can’t spend a billion dollars, you can just hope to reallocate it to different investment classes. And you can’t give away a billion dollars without a vast staff, in effect going into a new give away business at its core just another business. However one you are likely to know little about.” For a period, one part of his activities, he says, was recovering looted monies . Then, in his telling, he was representing a series of vastly wealthy people and families—helping them to navigate the ambitions of their wealth. If they had big dreams before, it’s nothing to what they can have now. If early in his career he might have seemed like a sort of George Peppard (there’s a physical resemblance) in Breakfast at Tiffany’s, a charmer , later he’s George Peppard in Banacek, smart and astute.. At just about this point in the narrative, the mystery about Epstein began to circulate in social circles. Epstein had acquired the major symbols of wealth but without obvious position, public holdings, or overt paper trails. His is a substrata of super wealth, i.e. without institutional establishment credentials or academic bona fides. He’s a freelancer. That’s the rub: he’s free. i.e. doesn’t work for anyone. Sure, Goldman Sachs partners and tech geniuses, they might have stratospheric wealth, but what to make of a HOUSE_OVERSIGHT_023631